Lack of Progress on Beltline Affordable Housing

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(APN) ATLANTA — Despite the allocation of fifteen percent of the bond proceeds from the first Beltline Tax Allocation District (TAD) bond issuance to the Beltline Affordable Housing Trust Fund, an investigation by Atlanta Progressive News shows that much of the funding has not been spent to date; few units of affordable housing have been produced; and the Beltline Affordable Housing Advisory Board is being ill-informed of the progress made on its recommendations.

Previously, APN reported that BAHAB initially recommended that fifteen percent of all units at developments receiving subsidy be affordable at 60 percent of the Area Median Income (AMI), with two-thirds of those–or ten percent total–affordable at 30 percent AMI.  However, Beltline, Inc., and the Atlanta Development Authority opposed the set-asides for low-income families at 30 percent AMI.

APN also reported that a series of recommendations by BAHAB to mitigate displacement as a result of the Beltline and gentrification have stagnated, and were removed from the final recommendations approved by the City Council of Atlanta related to the Beltline and affordable housing.  The recommendations had included inclusionary zoning, property tax assistance, assistance for renters, a community land trust, and others.

At the Beltline’s June 2010 Quarterly presentation to the Community Development/Human Resources committee of the Council, APN raised those concerns in public remarks, and Beltline CEO Brian Leary proposed a response at the next quarterly presentation.

However, at their September 2010 presentation, the Beltline failed to even address the issues.  APN then reminded the committee, and Chairwoman Joyce Sheperd (District 12) later said the Beltline would be coming back to specifically address the issues.

At the Tuesday, November 09, 2010, CD/HR meeting, the Beltline did come back to give a Powerpoint presentation, “Atlanta Beltline Affordable Housing Trust Fund.”

The Beltline noted that the Council had set a goal of 5,600 affordable units to be subsidized with BAHTF dollars.

To date, however, the only housing produced has been in the form of 32 grants of downpayment assistance to homebuyers.  1,035,356 dollars have been spent to date, or about 32,000 dollars per unit.

A total of 8,295,964 dollars were set aside from the TAD bond for the Trust Fund, leaving over 7 million dollars left unspent just from the first bond.

In addition, the Trust Fund has committed 2.5 million dollars total to two projects, City Hall East redevelopment and Phoenix House.

However, the City Hall East units will be rented or sold at 80 to 115 percent of the AMI, and the Council approved a special exemption for those units to be priced at near-market rate.

Little is known about the Phoenix House project.  Phoenix House is an independent living program for people with mental illness, located in Southwest Atlanta, and is run by Community Friendship Inc.

Kate Little, Chair of BAHAB, told APN in a phone interview that at the August 2010 BAHAB meeting, the Board was told that 69 new rental units would be produced or refurbished at Phoenix House, with only 21 of them affordable at 30 percent AMI.

However, Ethan Davidson, Beltline spokesman, insisted that all 69 of the units would be affordable at 30 percent AMI.

Little said the information could have changed since August and that the Phoenix House project was still not a done deal; that they were waiting on additional subsidies to materialize.

Little and Andy Schneggenberger, BAHAB Secretary, both said they were unaware of the presentation Beltline had made to CD/HR, nor did they have up-to-date information regarding the progress of the Trust Fund, despite the fact that BAHAB is charged with monitoring such progress, or lack thereof.

APN called Phoenix House and spoke with a social worker, who said she’d heard about an expansion but had no additional information.  APN called CFI but CEO Jean Toole was not available to comment.

It is not immediately clear whose information–Beltline or BAHAB’s–is accurate regarding Phoenix House.

With 850,000 dollars from the Trust Fund committed to City Hall East, one can deduce from the presentation that 1,650,000 dollars has been set aside for Phoenix House.

According to the “Progress to Date” slide in the Beltline’s PowerPoint, 71 of the total 131 units that have been produced or committed, or 53 percent of the units, will be affordable at 30 percent AMI.

James Alexander, Special Projects Manager for Beltline Inc., told APN that this shows that, despite the fact that Beltline opposed requiring set-asides at 30 percent AMI, that they are being produced anyway.

However, this is premised on Phoenix House’s expansion coming to completion, which is not certain; that all 69 units will be affordable to low-income families, which is in question; and that two of the downpayment assistance grants were made to families at 30 percent AMI.

When APN asked how a mortgage payment could be so low (a mortgage payment of 375 dollars per month based on a single-wage household), even with downpayment assistance, Alexander explained that families could opt to spend more than 30 percent of their monthly income on rent.

However, Anita Beaty of the Metro Atlanta Task Force for the Homeless, said that that was deceptive, because AMI itself is premised upon families paying no more than 30 percent of their income on rent.  Paying more is considered housing cost burden.

Affordable housing expert Dwanda Farmer questioned how a bank would even approve such a mortgage and said she would be concerned that the families were at risk for foreclosure.

As for the City Hall East units, it is not clear how Beltline reached an estimate for how many units would be produced.  As previously reported by APN, Jamestown’s plans for the redevelopment have been kept a secret; and the affordable housing requirements have not been codified in the agreement transferring the property from the City to the ADA.

However, Beltline assumes that approximately 20 rental units will be produced by Jamestown at 80 percent AMI, and 10 condos will be produced at 100 to 115 percent AMI.

When CD/HR committee approved the deviation from BAHAB’s policies for City Hall East, it was upon condition of approval by BAHAB.

Little and Schneggenberger said BAHAB did not formally vote to approve the deviations, but that they informally agreed upon condition.

“Beltline Inc. will make an additional contribution to the Beltline Trust Fund equal to the amount it would have cost to do 60 percent AMI units at City Hall East.  It will be an additional [one-time] injection to the Trust Fund to make up for the fact that those units will not be at City Hall East,” Schneggenberger said.

“That additional amount of money is reserved for development, affordable housing developments, in subarea 5 or 6, the 2 developments City Hall East straddles,” he said.

“In that initial phonecall they did agree to it, yes.  The staff said it was a good idea, the Board had no input as far as I know,” he said.

“BAHAB proposes to try to clarify some of the points, and then formally request in writing that ABI agree to this.  We put the conditions in the letter that Councilwoman Sheperd asked us for,” Little said.

The Beltline also said they would be looking to acquire property around the Beltline in order to produce affordable housing in the near future.

APN asked BAHAB about whether it will be revisiting its AMI recommendations, or its gentrification displacement mitigation recommendations.

“We will monitor how being it’s implemented over a period of time and determine whether it’s being followed [the AMI recommendations] and whether it’s working, and making recommendations on the basis of that,” Little said.

“We haven’t picked a date and said we’re gonna go back and look at it.  Probably some time next year,” Little said.

As for displacement mitigation recommendations, “we made those, we haven’t done anything with them,” Little said.

“We made those in order to address gentrification displacement mitigation outside of the TAD where we don’t have the ability to spend Trust Fund dollars,” Schneggenberger said.

“These suggestions at this point are largely still just that.  To become policy initiatives, somebody’s got to carry the water on them and make them happen,” he said.

“It is incumbent upon BAHAB to develop strategies to recommend these.  We should be carrying some of the water, we have not done that this year,” Little said.

“BAHAB has the opportunity to get the ball rolling on some of those pieces,” Schneggenberger said.

At the CD/HR meeting, senior advocate Ben Howard submitted ten questions in writing to the Beltline, while APN presented several verbally.

Sheperd asked APN to submit the questions in writing to the Beltline and CD/HR, despite the fact that some of these questions Mr. Leary already committed to answering back in June.  However, Councilman Kwanza Hall (District 2), said it would be best to have a written record.

APN will be submitting the questions in writing shortly.  Sheperd said both sets of questions would be answered by the next CD/HR meeting.

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